Is There Help from Congress on the Horizon?
June 25, 2020
The Food Supply Protection Act
Americans continue to grapple with the ongoing coronavirus pandemic and can now see its impacts on every aspect of their own lives and on the lives of others in their community. An uncoordinated and inconsistent federal response to the pandemic has caused great harm to the most vulnerable among us and spurred many people to action to help those in their own communities and regions.
One area in which these struggles are most obvious is in the food and farm sector. Coronavirus cases are increasing most rapidly in rural states that are the center of American agricultural production and rising fastest amongst farm workers whose living and working conditions and limited access to health care put them at untenable risk. Workers at slaughterhouses and food processing plants who have been forced back to work continue to get sick and die and there are now similar outbreaks in plants in Europe and South America. The instability of a highly concentrated food production system that has come to predominate over the past fifty years is obvious to all who care to see.
The current USDA response to coronavirus has been one of emergency response and relief, narrowly focused on making direct payments to farmers who experienced declines in prices for their farm products via the Coronavirus Food Assistance Program (CFAP) and on improving the ability of farmers to sell those products through the Farmers to Families Food Box Program to help bolster emergency feeding organizations that are experiencing overwhelming demand. While these efforts are necessary and appropriate, they have done little to address the underlying problems with our farm and food systems.
But that may be beginning to change as lawmakers introduce bills that they hope to incorporate into a future coronavirus response package to be considered later this year. One such bill, the Food Supply Protection Act (FSPA – S. 3840) was introduced last month by Senate Agriculture Committee Ranking Member Senator Debbie Stabenow (D-MI). The bill was cosponsored by all the Democratic members of the Ag Committee and Minority Leader Chuck Schumer (D-NY) which all but ensures that it will be central to deliberations of next coronavirus response package. The central provisions of the bill are outlined below, and they serve as important starting points for negotiations. The FSPA has three main sections to address food bank infrastructure, partnerships to purchase and provide farm products excluded from the current CFAP ‘Food Box’ program, and processing capacity of small and mid-sized food processors.
Infrastructure Grants to Non-Profit Feeding Organizations
The first section of the FSPA would make money available to help food banks and other non-profit emergency feeding organizations (EFOs) increase their capacity and expand supporting infrastructure to accommodate both the needs of hungry families and the surplus of farm goods and food products displaced from markets shuttered due to the pandemic. It would make $1 billion available split evenly between two program elements. The first component would make direct reimbursement payments (including advance payments) of $0.10 per pound to store and distribute donated food products. The second component would provide grants to build storage and distribution capacity and could be used to obtain space, processing equipment, packing materials and labels, hygiene and food safety equipment, and training. The grant portion of the program would have an expedited review process for small grants of less than $80,000. Both components have specific preferences to encourage durable increases in regional capacity including participation of local and regional food businesses, leveraging the use of local facilities and resources, and diverting perishable foods that would otherwise be wasted or go unharvested.
Food Purchase Partnerships
The second provision of the FSPA would support new food partnerships between food banks, EFOs, and other non-profit organizations to make certain farmers of every size, and in every region, could provide their products to families struggling to put food on the table. A major concern with the current CFAP ‘Food Box’ program is that many small farmers, producers, and food businesses were unable to compete for large federal contracts and that these contracts did not cover all regions equally or account for different foods produced in each part of the country. There are two components of this provision as well. The first component would provide $1 billion in funding to state and tribal governments to increase food purchases directly from local producers that would then be donated to local and regional EFOs. The amount of the grant to each state and tribe is by formula based on need and agricultural production but does have a minimum of $5 million to each state and $200,000 to each tribe. The second component would provide ‘such sums as are necessary’ (i.e. subject to appropriations by Congress) for USDA to purchase additional food from ‘eligible partnerships’ consisting of at least one food organization and one feeding organization that join together to prevent food waste and distribute food to individuals experiencing food insecurity. The partnerships could receive reimbursement for harvesting, processing, transporting, and distributing eligible foods – including retroactive payments for work already done to meet pressing community needs. This flexible approach to establishing partnerships could support innovative links between EFOs, farmers, and groups that have excess food processing and preparation capacity including restaurants, hospitality companies, schools, senior centers, food hubs, cooperatives, processors, and other public and private organizations seeking to transform farm products into food suitable for distribution to hungry families.
Food Supply Chain Grants and Loans
The third section of the FSPA would create $5.5 billion in grant and loan programs at USDA Rural Development to support the capacity and resilience of local and regional food systems as farmers and small and mid-sized food processors continue to work through the duration of the pandemic. Food processors could apply for rapid response loans of up to $50,000 (at 2.375% interest) to upgrade their operations – including processing lines, packing materials, equipment, personal protective equipment (PPE), etc. – to increase their capacity and by extension eliminate bottlenecks in the national supply chain. For larger projects that require more significant retooling and investment, the USDA’s Business and Industry (B&I) Loan Guarantee Program would provide loan guarantees for processors seeking private sector funding – up to 100% of loans up to $5 million and 90% of loans from $5 – $25 million. Finally, this section would establish a program to provide grants up to $1 million that processors could use to either repay loans or cover other costs associated with upgrading facilities, processes, and worker safety.
Opportunity for Everyone
While not a specific section of the FSPA, it is important to recognize that in every section of the bill there is considerable emphasis on equity and ensuring that all small farmers, processors, and food businesses could participate in the new programs. This takes the form of program preferences for, and targeted outreach to, beginning and historically underserved farmers, and program structures – like accelerated review of applications for small grants and reduced prerequisites for loans – that are most likely to be used by these producers. Specific targeting of funds to tribes and the authorization for USDA Rural Development to support investments in urban communities further demonstrates the sponsors commitment to a more inclusive model for future coronavirus response packages.